EU public Country-by-Country Reporting

March 29, 2024

On December 1, 2021 the EU public Country-by-Country Reporting (CbCR) Directive was published in the EU Official Journal and entered into force. The objective of the Directive is to create corporate transparency and to enhance public scrutiny. The Directive had to be transposed into national legislation by June 22, 2023. Differences have been detected between Member States (e.g. implementation date and safeguard clause).

Dutch implementation

On 1 March 2024, the Dutch Decree on implementation of public country-by-country reporting was published. The new decree dated 14 February 2024 implements the Directive (EU) 2021/2101 of the European Parliament and of the Council of 24 November 2021, which amends the Directive 2013/34/EU. This EU Directive addresses the disclosure of income tax information by certain undertakings and branches.

The provisions of the Dutch decree are largely aligned with the text of the Directive. However, there are three key takeaways:

  • The safeguard clause has been adopted, allowing companies to not publish information which would be very disadvantageous to the competitive position of the respective entity.

  • Both filing of the report in the Dutch Trade Register as well as website publication is required within 12 months after the financial year end. The report requires to be available on the website for at least five years.

  • Failure to comply with the disclosure requirement will result in civil law penalties.

The public disclosure rules will apply to financial years starting on or after June 22, 2024.

In summary, the EU Directive entails the following, reference is also made to the following link  and this flyer.

EUR 750 million revenue threshold and EU presence

The Directive applies to EU Ultimate Parent Undertakings (UPUs) or Standalone Undertakings with a consolidated net turnover / net turnover exceeding  EUR 750 million for each of the last two consecutive financial years. Non-EU UPUs with a consolidated net turnover exceeding  EUR 750 million for each of the last two consecutive financial years and with an EU presence that includes either medium-sized or large subsidiaries or branches that meet stipulated criteria also fall under the Public CbC reporting obligations.

Public information

The information to be disclosed must be reported on an aggregated basis: per Member State, per each non-cooperative and grey list jurisdiction, and aggregated for all other jurisdictions. The OECD CbC Report data can be used for this. The following information must be reported (and is similar to the OECD CbC report):

  • Revenues

  • Profit(loss) before income tax

  • Income tax paid (on cash basis)

  • Income tax accrued – current year

  • Accumulated earnings

  • Number of employees

  • Additional descriptive information.

Effective date and filing deadline

The provisions in the Netherlands applies to financial years starting on or after June 22, 2024. If the fiscal year corresponds to the calendar year, this would mean that the first reporting year for multinationals will be FY2025. Some member states introduced the provisions earlier (e.g. Romania).The reporting deadline is within 12 months of the balance sheet date of the financial year for which the report is prepared. Member States are free to set the reporting deadline within this 12-month period, which means it can also be for a shorter period.

The information has to be publicly accessible, free of charge and in an electronic reporting format which is machine-readable via the (local) company website.

Failure to comply with these new reporting obligations may result in penalties and possibly directors' liability.

Action required

We recommend that you take steps now to determine the in-scope EU jurisdictions and where exemptions may apply, to verify specific local regulations and to determine the filing strategy. In scope companies with presence in countries requiring FY2024 data to be disclosed as a first year should start working towards the first submission / disclosure deadline late 2025. In some cases, depending on the jurisdiction of the UPU and countries in scope of the report, FY2023 data will be the first year of disclosure.

We would be pleased to help you draft the report and analyze the picture presented in the report. Next to the upcoming mandatory public CbC reporting, we see a clear trend towards more tax transparency in general, whereby reports are also being published with both quantitative and qualitative data, often on the basis of voluntary standards, like GRI 207 or the Dutch employers’ organization VNO-NCW. The context outlined in these reports is often critical for how reports are being evaluated by the various stakeholders. See the following link for further information.  

Please let us know if you would like to receive more information about this matter. Our specialists would be happy to discuss public CbCR and/or the broader tax transparency developments with you. 

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